As insurance agents, brokers, advisers, risk managers – whatever you want to call us – we hear it all. The majority of the time it is negative statements regarding insurance – mostly about premiums, bills, audits, etc. We always hear from an individual or business owner that one of their friends told them how to save a fortune on their insurance or how to scam the system (see “recording employees as subcontractors”). You hardly ever hear from one of your friends how insurance saved their lives – literally or financially – or how it rebuilt their home after a Hurricane Katrina or Sandy. Yet, the never ending search for people trying to get ‘something for nothing’ continues. Frankly, it’s a shame.
Why does everyone want to save a fortune on their insurance premiums yet they are willing to go buy the latest technological gadget? They want the social status of having ‘the best’ but are unwilling to pay for the best protection. Individuals or businesses that pay the extra money for more insurance coverage should be applauded and advertised. They should be proud that they have the best protection money can buy. Instead – everyone wants less – less coverage, lower premiums, less headaches and so forth. The best way to put your family in a position with less risk is to pay for better protection.
I like to use the example of people who pay to heat their homes (for those unaware, we live in WI and therefore, this is mandatory). What temperature do you keep your thermostat at during the winter months? I would guess that the average is somewhere between 65 and 70. Why? That is where we are most comfortable – not too hot and not too cold. It also avoids us having to pay for problems that may arise – like illness or freezing pipes. Why not keep the thermostat at 45 or 50 degrees? The human body would be able to survive, but your life would be extremely uncomfortable and probably miserable. We are willing to pay for that comfort – with very few complaints and very few questions asked. We correlate paying for heating as a cost of living in Wisconsin.
Why don’t we correlate paying for insurance and protection as a cost of living (or doing business)? My guess is that it is the perception that insurance is a scam, not worth the money, and that insurance companies make billions of dollars. Some of this is true and most of it is false, but people need to realize the billions of dollars the private insurance industry pays out on a yearly basis to restore individual lives. Every individual certainly has every right to under insure or not purchase insurance at all (except for auto liability insurance in the state of WI). However, don’t expect any sympathy from your insurance advisor when an accident does occur and you don’t have proper coverage. Would you have sympathy for someone who turned their heat down to 30 degrees and then complained about frozen pipes? I didn’t think so.
As always, talk to an insurance professional when determining what coverage is appropriate for you. If you are paying for the best coverage you can afford – good for you. If you are on the other end of the spectrum, consider all possible outcomes and determine what you believe is in your best interest.